Comparing Water Heaters: Tankless vs. Tank

Water heaters are important in our homes because they give us hot water whenever we need it. There are two main types: tank and tankless water heaters. A tank water heater stores and heats a large amount of water, ready for use anytime.

Meanwhile, a tankless water heater makes hot water only when you turn on the tap, which can save energy because it’s not keeping water hot all the time.

Tankless heaters can be more efficient than ones with tanks. In fact, if your home uses less than 41 gallons of hot water daily, a tankless heater might help you use up to 34% less energy.

They also last longer – around 20 to 30 years compared to just 10 to 15 years for tank models.

However, getting a new tankless heater can cost between $800 and $1,500 at first. This is more expensive than the cost of buying one with a storage tank. But even though storage tanks cost less upfront and keep lots of hot water ready all day long, some people choose insulated ones that don’t lose heat when not being used.

Choosing the right size for your home is very important whether you go for a tank or no-tank model. And remember, installing a new kind often means changing some things in your house like pipes or gas lines which could add extra costs.

With so many points to think about such as money spent upfront versus what gets saved later on energy bills or how long they last before needing replacement – making this choice requires careful thinking! Get ready to learn more about these two options!

Understanding the Basics: Tank vs. Tankless Water Heaters

Dive into the core distinctions between traditional tank water heaters and their modern tankless counterparts, each designed with unique mechanisms to supply your home with hot water.

Discover how a hefty insulated cylinder contrasts with a sleek, on-demand heating unit as we unveil the operational intricacies behind these two pervasive varieties of water heaters.

How does a storage tank water heater work?

A storage tank water heater heats water and stores it until needed. It can use electricity, gas, oil, or propane as an energy source. Cold water enters the tank from the bottom through a dip tube.

The heating element inside warms up the water. An adjustable thermostat controls the temperature.

The hot water rises to the top of the tank. When you turn on a hot tap, this heated water flows out to your faucets or appliances. Insulation around the tank helps keep heat in and reduces energy loss.

But some heat will always escape over time; this is called standby heat loss. Lower cost insulated models help lessen this effect and save on operating costs.

How does a tankless water heater work?

Tankless water heaters provide hot water only when you need it. They use high-powered burners and a heat exchanger to quickly warm the water. As soon as you turn on the tap, cold water travels through pipes into the unit.

The burners then ignite, heating the water instantly.

These heaters can run on electricity, natural gas or propane. Gas-fired models have a pilot light that must stay lit, which could waste energy. But some tankless heaters come with an intermittent ignition device (IID).

This device lights the burner only when necessary, helping to save energy.

The Pros and Cons of Tank Water Heaters

In assessing tank water heaters, we delve into the mixed bag of benefits and drawbacks they present to homeowners. From their reliable hot water supply to concerns over energy consumption, this section explores how these systems measure up in practical terms.

Advantages of tank water heaters

  • Lower upfront costs: Tank water heaters have a lower initial cost compared to tankless models.
  • Consistent hot water supply: You can count on having hot water when you need it, as storage tanks keep a ready supply heated.
  • Variety of sizes: These heaters range from 20 to 80 gallons to fit different household needs.
  • Multiple energy source options: They can use electricity, gas, oil, or propane, giving you flexibility in choosing an energy source.
  • Reduced heat loss: Insulated models help cut down on standby heat loss and operating expenses.

Disadvantages of tank water heaters

Although tank water heaters have their benefits, they also come with several downsides. It’s important to look at these before deciding on a water heater for your home.

  • Standby heat losses can be an issue: Because storage tank water heaters keep a reserve of hot water, energy gets wasted maintaining the temperature. This means higher energy bills and less efficiency.
  • They take up more space: These heaters require a significant amount of room for installation, which can be difficult in smaller homes or apartments.
  • Limited hot water supply: Once the hot water in the tank is used up, you must wait for it to fill up and heat again. During this time, there may be no hot water available.
  • Life expectancy is shorter: Typically, tank water heaters last between 10 to 15 years, which is less than the lifespan of tankless models.
  • Risk of water damage increases: If the tank leaks or bursts, it can cause significant water damage to your property. You need to watch out for signs of corrosion or wear.
  • Energy costs are higher in the long run: The cost of electricity or gas to continually heat and reheat the water adds up over time, making these units less economical.
  • Hard water challenges: In areas with hard water, mineral buildup in tanks can reduce efficiency and may lead to more maintenance issues.

The Pros and Cons of Tankless Water Heaters

Delving into the realm of tankless water heaters unveils a world where on-demand hot water is king, yet the kingdom isn’t without its challenges; let’s discern whether these units reign supreme over their traditional tank counterparts.

Advantages of tankless water heaters

Tankless water heaters are known for their energy efficiency and space-saving design. They provide many benefits over traditional tank models.

  • Offer continuous hot water on – demand, ensuring you never run out during use.
  • Save up to 34% on energy for homes using less than 41 gallons per day, cutting down utility bills.
  • Have no standby heat loss because they heat water as needed rather than storing it.
  • Boast a longer lifespan of over 20 years, which is longer than tank water heaters.
  • Take up less space in your home since they can be mounted on a wall, freeing up floor space.
  • Reduce the risk of leaks and water damage associated with tank failures, as there is no large volume of stored water.
  • Provide cleaner water as there’s no sediment build – up from sitting in a tank.
  • Can increase your home’s value with their modern, energy – efficient appliances.

Disadvantages of tankless water heaters

Tankless water heaters come with several drawbacks despite their energy-saving technology. Here are some of the cons to consider before deciding on an on-demand water heater.

  • Tankless models can’t always keep up when you turn on lots of taps at once. They have a limited flow rate, meaning they struggle with high hot water demand.
  • You may need to plan for higher installation costs. Fitting a tankless system often means additional work like upgrading natural gas lines or electric service.
  • If you choose a gas – fired unit, it wastes energy by keeping the pilot light on all the time. This burns fuel even when no hot water is being used.
  • The upfront cost is more than that of a hot water tank. Buying and setting up a tankless model hits your wallet harder in the beginning.
  • It takes longer to break even with a tankless water heater because of high initial purchase and installation fees. You’ll wait more time to start saving money.
  • There could be extra plumbing work required. Homes that previously had storage – tank systems might need significant retrofitting for tankless units.
  • Hot water output for multiple appliances can be limited if they are running together, as the heater has capacity constraints.

A Comprehensive Sizing Guide for Water Heaters

Choosing the right size for your water heater is crucial. For tank water heaters, you’ll need to think about how much hot water you use during peak times. Imagine everyone in your house taking showers, running the dishwasher, and doing laundry at the same time.

The litres per minute (LPM) all these activities require will tell you how big a tank you’ll need.

Tankless water heaters work differently; they heat up water as it passes through. You won’t store any hot water with these; instead, they provide it on demand. To pick the right size, calculate the LPM rate when multiple outlets are used simultaneously.

Make sure your choice can handle this flow rate so that you never run out of hot water when you need it most. This ensures energy savings because an appropriately sized unit runs more efficiently without unnecessary strain or waste.

Cost Comparison: Initial Purchase and Installation

When considering the cost of water heaters, both the initial purchase price and installation expenses are crucial factors. Here’s how tank and tankless models compare financially:

Water Heater TypeInitial Purchase CostInstallation Cost
Storage Tank Water HeaterLower upfront costVaries depending on model and setup
Tankless Water HeaterHigher initial investmentCan be more expensive, particularly for whole-house systems
Point-of-Use Tankless Water HeaterLess costly than whole-house tanklessInstallation usually cheaper than other types

Storage tank water heaters come with a more affordable price tag at the outset. Installation costs, however, can vary significantly based on the specific model and the complexity of the setup required. Insulated models can help reduce operating costs, making them a cost-effective option despite their lower initial cost.

Tankless water heaters, on the other hand, demand a higher initial purchase price. Installation can also be pricier, especially for systems that serve the entire house. Nevertheless, their energy efficiency can lead to long-term savings, offsetting the initial outlay.

Point-of-use tankless systems offer a middle ground, being less expensive than comprehensive tankless systems and typically cheaper to install than both other options. This makes them an attractive choice for those looking to save on installation while benefiting from tankless technology.

Energy Usage and Efficiency: Which is More Economical?

Moving on from the initial costs, we now consider how tankless and tank water heaters stack up in energy usage. Tankless units shine in efficiency as they heat water only when needed.

This means no energy goes to waste keeping a tank of water hot when it’s not being used. Households that use less than 155 litres daily can save up to 34% energy with a tankless heater compared to traditional tanks.

With no standby heat loss, these on-demand systems are kinder to your wallet over time. Though they might have higher upfront costs, their ability to efficiently utilise energy translates into long-term savings.

Plus, with life expectancies stretching beyond 20 years, the investment in a tankless system often pays off with both reduced bills and fewer replacement needs.

Durability: Comparing the Lifespan of Tank vs. Tankless Heaters

Durability is a key factor when deciding between tank and tankless water heaters. Below is an overview of their comparative lifespans in an HTML table format.

Water Heater TypeExpected LifespanPossible Lifespan Extension
Storage Tank Water Heaters10 to 15 yearsYes, with anode rod replacement
Tankless Water Heaters20 to 30 yearsHigher longevity with minimal maintenance

Tankless models demonstrate a longer life expectancy, often surpassing 20 years. Storage tank heaters typically serve for 10 to 15 years. Anode rod replacements can extend tank heaters’ life. In contrast, tankless units require minimal maintenance for an extended lifespan. Tankless heaters potentially offer double the service life of traditional tank models.

Verdict: Which is the Better Option in the Long Run?

Tankless water heaters stand out as the wiser choice for long-term savings and efficiency. They use less energy, which can lead to lower bills over time. You won’t need to replace them as often because they can last more than 20 years.

Their on-demand heating means you get hot water when you need it without waiting.

Storage tank water heaters have their benefits, but they usually only last about 10 to 15 years. They also tend to use more energy, which could cost more in the end. If saving money and being kinder to the environment are important to you, going tankless is a smart move.

Choose a reliable brand like Rheem and ensure proper installation by a qualified plumber for the best performance.


In choosing between tankless and traditional tank water heaters, consider your family’s needs. Look at long-term savings versus upfront costs. Remember that energy efficiency can also lead to future cost reductions.

Finally, discuss options with a professional to find the best fit for your home. Hot water needs are unique, so pick the heater that matches yours perfectly.

For an in-depth look at selecting the right size for your water heater, please visit our comprehensive sizing guide.


1. What’s the difference between tankless and tank water heaters?

Tankless water heaters, also known as on-demand or instantaneous water heaters, heat water directly without using a storage tank. Tank heaters have a hot water storage tank that keeps heated water until it’s needed.

2. Are tankless water heaters better for saving energy?

Yes, according to the US Department of Energy, on-demand water heaters can be more energy-efficient because they don’t heat and reheat water in a storage tank.

3. Can solar energy work with both types of water heaters?

Absolutely! Both types of hot water systems can use solar heating to save on traditional energy sources like gas furnaces or electricity.

4. How long do these heaters usually last?

Generally, Consumer Reports suggests that most hot tap-water tanks come with warranties lasting from 5-15 years while many demand-type heater warranties cover parts for up to 20 years.

5. Which is quicker at delivering hot water to my kitchen or bathroom?

On-demand variants are faster at heating pots and pans or filling your tub since they provide instantaneous hot streams rather than pulling from a pre-heated supply.

6. Will changing my old heater for a new one be costly right away?

It might cost more upfront to switch over, but you could reach the break-even point over time thanks to lower running costs—especially if you choose an efficient model suitable for your basements or laundry rooms.

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